Working Together

When it comes to wedding planning, choosing the flavour of your cake and finding the perfect dress aren’t the only details that cross your mind. Budgeting with your significant other–and not just for the wedding day alone–is also of importance. Technically your life and the way you plan/think alters when you go from one person to two. So, how do you suddenly deal with the change? Here are five tips to help you budget as a couple.

1. Manage Your Finances. If you haven’t already done so, taking a good look at your day-to-day and monthly expenses is important. It’ll be easier to examine your financial situation as a whole if you have an estimated figure (i.e. how much you spend on bills, food, debts, leisure activities, etc.). Once you’ve got a firm grasp on your expenditures, the next step is to take a look at your expenses together. This is where communication is key–if you’re about to move in together make a breakdown list of who should pay for what–like your utilities. “You should have a good understanding of each other’s expenditures,” advises Evgeniya Pollock, certified financial planner at Stewart & Kett Financial Advisors Inc. (stewartkett.com) . “Discuss with each other certain amounts and limits you may have.”

2. Consolidate. Combining your utilities or expenses, once you’ve broken them down into sections, can make it easier to organize payments and cut down on costs. “It’s advisable to put together any expenses you can, such as car insurance or cell phone plans. There are plenty of family plans out there,” says Pollock.

3. Cut Down. “In order to figure out how much you need to cut down, you need to figure out what your net income as a couple is, after tax, and subtract the fixed expenses, like your mortgage payments, debts, student loans, contributions to RRSPs and vacation funds,” says Pollock. “Look at the high priority expenses first, and then look at your discretionary expenses and compromise on what’s important and what’s not.” Breaking down your expenses will streamline your finances and make it easier to manage together.

4. Goals & Savings. Ideally, both of you should share your financial goals. Are you saving for a huge trip, a car or a house? It’s important that you’re both on the same wavelength and that you support each other’s goals–especially if you’re dealing with a huge sum. This will help you manage your money and spending habits, particularly if there are big-ticket items on your wish list.

5. Open An Account…Together. It’s not a must (and you can still keep you independent accounts open), but having a joint savings account is highly recommended, as it can help you save and provides a buffer in case of a financial emergency (i.e. health issues, loss of job, etc.). It is also beneficial as it makes it easier to track your bills and can reduce transaction and banking fees.